These arrests followed a joint operation by Iras and Singapore Customs on May 27, 2016, in which the men were caught red-handed for allegedly making the fraudulent GST refund claims at Changi Airport.

The Indian nationals were each offered bail of SGD 50,000 on Thursday and will be back in court on February 24.

A joint press release by Iras and Singapore Customs stated that tourists can claim GST refunds on goods they have bought and taken out of Singapore.

Those who do not purchase anything but seek or obtain a GST refund under the tourist refund scheme commits an offence under the GST Act.

Under the eTRS, a tourist receives a receipt for goods purchased and an eTRS ticket when he buys items from a GST-registered retailer that participates in the scheme.

The tourist can then use the eTRS ticket to make a GST refund claim at ports of departure such as Changi Airport.

They can also make similar transactions using the credit cards which they had used to buy their goods.

In a GST refund-claim fraud scenario, an offender will pretend to be a tourist and pay local customers, who are not entitled to eTRS refunds, for their jewellery invoices.

With these invoices and by using a passport, the offender will obtain eTRS tickets from the respective shops. He will then claim eTRS GST cash refunds at ports of departure.

Anyone who commits the offence of wilful intent to make a false GST refund claim, or assist any other person to make such a false claim, faces a penalty of up to three times the amount of refund wrongfully claimed and a fine not exceeding SGD10,000, and/or imprisonment of up to seven years.